The consumer lending industry in North Carolina finally achieved its goal of raising interest rates and fees on small loans, despite opposition from the NC Banking Commissioner, NC Attorney General, and numerous consumer groups. The Associated Press says the industry paid about $1.5 million for an army of 20 lobbyists to sell its message to General Assembly members – and also spent over $300,000 on campaign donations for state politicians, with House Speaker Thom Tillis and Senate leader Phil Berger at the top of the list of recipients. Actually, Democracy North Carolina’s research shows the campaign donations exceeded $450,000 in the AP’s three-year period of focus, January 2010 to December 2012, with Tillis receiving over $50,000. Many of the donors are owners of storefront finance companies who are not easily identifiable on campaign disclosure reports.
The AP story quotes industry leader Royce Everette of Greenville describing his success. “Through our efforts with lobbyists and talking with people about the industry, we have developed relationships with people on both sides of the aisle.” He said he’d been working for 15 years to raise the rates; the breakthrough came with the change in control at the General Assembly. “The Republicans are more free market,” he said. “They believe that people can make their own decisions.” In fact, Everette was a major player in getting local consumer lenders to increase, bundle and target their donations to 15 Republican challengers running against Democratic incumbent legislators in the summer of 2010. That gamble paid off with the new Speaker, Thom Tillis, pushing through a bill for the industry in 2011 that ultimately stalled in the Senate. This year’s successful legislation is less ambitious in its rate-increase levels but still highly profitable – for the industry and for its political backers.